3. Objective of information and
logistics management
Minimise logistics costs
Deliver maximum customer service
4. Objectives of the supply chain
manager
1. Communication increase along chain –
uninterrupted flow
2. Cost control: decreasing inventory,
keeping high C-service levels …
decrease supplier base and develop
supplier relationships
3. Standardisation of parts … on time,
happy customers, reduced inventory …
5. Factors to be taken into
consideration
• IT systems
• Cost
• Customers
6. IT
Data on:
• Inventory
• Transportation
• Distribution facilities
• Customers throughout supply chain
• Invoices and payments
7. Cost & C-service
Transport
Inventory
Stockout Communication
Materials handling Dependability
Warehousing Time
Order processing Convenience
Total logistical cost factors Customer service factors
8. How customer service standards will differ by type
of firm
Type Customer service standard
Wholesaler At least 98 percent of orders filled accurately
Manufacturer Order cycle time of no more than five days
Retailer Returns accepted within 30 days
Airline At least 90 percent of arrivals on time
Trucker A max of 5 percent loss and damage per year
Restaurant Lunch served within 5 minutes of order
9.
10. PRINCIPLES OF SUPPLY CHAIN
MANAGEMENT
1. Communication
2. Flexibility, inventories and customer service
3. Decision-making
4. Metrics and data-collection:
• Quality
• Delivery
• Flexibility
• Cost
• After-sales support
11. COMMUNICATION
A clever retailer would share the point-of-
sale data and forecasts with suppliers
Till point link from retailer to supplier …
automatic ordering …
12. THE BASIS FOR GOOD
CUSTOMER SERVICE
Influence
Flexibility Customer service
Influence Influence
Inventory
23. Pitfalls
1. No supply chain metrics
2. Inadequate definition of customer service
3. Inaccurate delivery status data
4. Inefficient information systems
5. Ignoring the impact of uncertainties
6. Simplistic inventory stocking policies
7. Discrimination against internal customers
24. Pitfalls
8. Poor coordination
9. Incomplete shipment methods analysis
10. Incorrect assessment of inventory costs
11. Organisational barriers
12. Product-process design without supply
chain considerations
13. Separation of supply chain design from
operational decisions
14. Incomplete supply chain
25.
26. • Higher competition i.e. pimp local
manufacturing
• Longer order-to-delivery times
• Less-dependable forecasts
• Reduced production flexibility
• Higher levels of inventory
• Thus, coordination should be better
